Dealing with Contract Variations in PPPs:

Social Mechanisms and Contract Management

in Infrastructure Projects
Hatice Çiğdem Demirel 1; Leentje Volker, Ph.D. 2; Wim Leendertse, Ph.D. 3;
and Marcel Hertogh, Ph.D. 4
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.

Abstract: Variations are inevitable in public–private partnerships (PPP), due to the extensive duration of these contracts and the dynamic
environment in which PPPs are usually implemented. Changes may lead to variations in the contract and consequently adverse reactions by
partners. For the social and financial viability of the project, it is important to have mechanisms that can actively deal with variations that
occur during the project life cycle. However, formal contracts with standardized project procedures do not always offer effective ways to cope
with potential project dynamism. This paper presents the results of an in-depth case study into the modus operandi of a large-scale PPP
infrastructure project with regard to variations in the realization phase. It was found that variations in infrastructure projects could not be dealt
with solely through the formal contract rules, but that additional social mechanisms between the public commissioners and contracted com-
panies were needed. Changes and contractual mechanisms are extensively discussed in project management literature. Also, the use of social
mechanisms—complementary to the formal contract rules—is stressed. However, the literature offers little evidence about how these dealing
mechanisms work in practice. This study reflects a real-life practice in responding to variations in a PPP and presents different ways in which
various mechanisms, such as contract provisions, human relationships, organizational structure, digital tools, professional knowledge, and
actor competences are interactively employed by project managers to deal with variation. General conclusions are drawn about the mech-
anisms observed, which may be applicable in the coordination of future interaction in public and private collaborations. DOI: 10.1061/
(ASCE)CO.1943-7862.0001714. © 2019 American Society of Civil Engineers.
Author keywords: Dealing mechanism; Public–private partnerships; Contract dynamics; Contract management.

Introduction circumstances during the life cycle of a project. According to

A public–private partnership (PPP) is a delivery method frequently
used to enhance the economic and societal value of public infra-
structure projects. In a PPP project, a private party or consortium
is granted a concession to finance, build, and operate a public
project and to provide the corresponding product or service and
collect ensuing revenues (Xiong and Zhang 2014). The PPP ap-
proach may increase the economic value of infrastructure outputs
because management by a private entity can bring important effi-
ciency gains to the public authority body in question (Liu et al.
2014; Iossa 2015). However, in the case of unexpected events,
a project can suffer high-profile failures. Long-term arrangements
(usually around 25–30 years) increase exposure to changing
1
Ph.D. Researcher, Faculty of Civil Engineering and Geosciences,
Delft Univ. of Technology, Stevinweg 1, Delft, CN 2628, Netherlands
(corresponding author). ORCID: https://orcid.org/0000-0002-6893-8383.
Email: h.c.demirel-2@tudelft.nl
2
Professor, Dept. of Civil Engineering, Univ. of Twente, De Horst 2,
Enschede 7522 NB, Netherlands. ORCID: https://orcid.org/0000-0003
-2766-3763. Email: l.volker@tudelft.nl
3
Professor, Faculty of Spatial Sciences, Groningen Univ., Landleven 1,
Groningen 9747 AD, Netherlands. Email: w.l.leendertse@rug.nl
4
Professor, Faculty of Civil Engineering and Geosciences, Delft Univ.
of Technology, Delft, CN 2628, Netherlands. Email: m.j.c.m.hertogh@
tudelft.nl
Note. This manuscript was submitted on October 9, 2018; approved on
March 21, 2019; published online on September 12, 2019. Discussion per-
iod open until February 12, 2020; separate discussions must be submitted
for individual papers. This paper is part of the Journal of Construction
Engineering and Management, © ASCE, ISSN 0733-9364.
Taleb (2008), unexpected events or “black swans” are, therefore,
a fact of life. Such events can, however, also alter the financial bal-
ance of the relationship that was assumed by each party upon sign-
ing of the partnership agreement, making the agreement sensitive
from a commercial or financial perspective (Mandri-Perrot 2009).
Breaking a PPP contract can be expensive, and counterparties can
suffer if early termination takes place (Liu et al. 2017). Scholars
in PPP emphasize that when PPP projects encounter unforeseen
risk events (e.g., Cruz et al. 2014), the parties should conduct
renegotiations and attempt to take steps to resolve the imbalance
rather than seeking early termination of the contract (Song et al.
2018).
Renegotiations usually arise because of the inadequacy of the
contract to address contingencies (Cruz et al. 2014). According
to Domingues and Zlatkovic (2015), current PPPs are controlled
by a rigid contractual structure. Scholars agree that there are still
research gaps in the fields of flexible or adaptive contracting
regarding PPPs. For example, Neto et al. (2016) and Cui et al.
(2018) believe that the interest in more dynamic contracting will
develop into a key research area. This is partly due to the adverse
effects of variation as experienced in current practice. Related
to this, there is also an ongoing discussion concerning whether
PPP procurement and contracts deliver the promised infrastruc-
ture project outputs or value for money (e.g., National Audit Office
2018).
Given these concerns, there is a need for the appropriate design
of contracts and for procurement methods to be able to adapt to
uncertainty during the project life cycle, whether a PPP is involved
or not. Thus, public and private interactions need mechanisms to

© ASCE 04019073-1 J. Constr. Eng. Manage.

J. Constr. Eng. Manage., 2019, 145(11): 04019073

 coordinate their future partnerships under changing circumstances.
In this paper, we review practices in a large PPP infrastructure
project during its realization phase to identify and discuss mecha-
nisms that are used in practice dealing with variations. We will call
these mechanisms “dealing mechanisms”: a constellation of ele-
ments and/or activities that can be used by partners to adapt an
initial agreement under variation. Dealing mechanisms are essential
to coordinate PPPs under contract variations, ensuring that the con-
tract adequately governs the parties’ relationship over the term of
the contract and that both parties maintain the associated benefits.
Changes and contractual mechanisms are extensively discussed
in project management literature. Also, the use of social mecha-
nisms–complementary to the formal contract rules–is stressed.
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.
However, the literature offers little evidence about how these deal-
ing mechanisms work in practice. The primary aim of the study is
to achieve a better understanding of the range and elaboration
of different contractual and noncontractual mechanisms in the prac-
tice of PPPs, and their mutual relationship and interaction. The
study thus starts from the following research question: What mech-
anisms to deal with variation are used in practice for infrastructure
projects additional to the formal contract rules and how are they
operationalized?
This paper first describes general experiences from previous re-
search on dealing with variations in construction projects from rel-
evant recent literature, and identification of mechanisms currently
used in the PPP infrastructure sector are identified. The following
“Results” section presents the results of an in-depth case study
looking at the modus operandi of a large-scale PPP infrastructure
project with regard to dealing mechanisms employed in the reali-
zation phase. The case reflects real-life practice in a PPP project
and reveals how various dealing mechanisms are interactively em-
ployed in an actual contract under variation. It is concluded that
noncontractual mechanisms are especially required for PPP co-
ordination providing the necessary additivity to ex-ante agreed for-
mal contracts. Based on the results, conclusions and implications
for both researchers and practitioners are then formulated with re-
spect to setting up and improving interaction between public and
private parties in the context of infrastructure projects.
Dealing with Variations in Contracts
Need for Contract Adaptability
Large infrastructure projects are often characterized as complex,
nonlinear, and dynamic processes (Khan et al. 2016) that include
specific uncertainties and interdependencies among a large number
of stakeholders (Klijn and Koppenjan 2016). Increased stakeholder
involvement may create more interaction, and consequently more
unpredictability and risks. When outcomes become harder to pre-
dict and are spread over a longer period, projects are more difficult
to define ex ante and become more vulnerable to variation (Brown
et al. 2015; Xiong et al. 2018). According to Shrestha et al. (2018),
uncertainties may even be magnified.
In the context of PPPs, many scholars address the fact that
contracts have to be dynamic or adaptive to potential challenges
and should provide the possibility to renegotiate. Spiller (2018), for
example, stated that public contracts are generally inflexible when
faced with uncertainties and, therefore, always require renegotia-
tion during execution. According to other scholars (e.g., Cruz et al.
2014; Hart 2017; Sarmento and Renneboog 2016; Xiong and
Zhang 2014) the reason for renegotiations is mostly incompleteness
because of the inability to foresee all possible future events. The
literature describes several mechanisms that have been introduced
to deal with this kind of flexibility (Domingues et al. 2015;
© ASCE 04019073-2
J. Constr. Eng. Manage., 2019, 145(11): 04019073
Javed et al. 2014). Cruz and Marques (2013) proposed to divide
a PPP infrastructure contract into two components: a long-term
concession (30 years) for building and maintaining infrastructure
and an accompanying short-term contract (10 years) for managerial
services. Xiong and Zhang (2016) suggested a renegotiation model
that enables governments to compare different measures in the case
of variation, such as toll adjustment, contract extension and annual
subsidy or unitary payment adjustment, and a possibility to suggest
a more suitable combination in renegotiation. Domingues and
Zlatkovic (2015) proposed the idea of using SWOT (strengths,
weaknesses, opportunities, threats) analysis as a tool to agree in
more contractual flexibility. They suggest regularly analyzing
potential benefits that could be captured and pitfalls that could
be avoided and using this analysis for ongoing mutual agreement.
Mouraviev and Kakabadse (2015) presented ways to reduce
government overregulation (e.g., bureaucratic tariff setting and ex-
cessive procurement restrictions) to achieve more “action room”
and thus greater flexibility in the management of PPPs.
On the national level, many countries have developed standard-
ized PPP contracts, along with guidance manuals. For example, the
Standardisation of PF2 Contracts issued by HM Treasury (2012)
in the United Kingdom, the Dutch DBFM Model for Infrastruc-
tures issued by Rijkswaterstaat (2014), and the ‘Standard Form
Public Private Partnership Project Agreement in New Zealand
(New Zealand Government, The Treasury 2013). These standards
allow for renegotiation under changing circumstances. According
to the Standardisation of PF2 Contracts, a variation protocol is
to be put in place as an appropriate change dealing process, in com-
bination with transparency in the pricing of the change. Standard-
ized contract versions generally include changes proposed by the
contracting authority and changes proposed by the private party.
Most PPP contracts recognize a right of the contracting authority
to propose changes to the terms of the contract (including the
agreed terms of the asset’s design, construction, operation, and
maintenance) and that the private partner is entitled to relief and/or
compensation for the consequences of complying with those
changes (e.g., Eurostat 2016). If renegotiation is initiated, the public
and private partners will negotiate on which measures should be
taken to compensate for any loss by the concessionaire, such as debt
service coverage ratio, loan life coverage, internal rate of return, and
revenues (Xiong and Zhang 2016).
Dealing Mechanisms for Contract Adaptability
Brown et al. (2015) identify two interrelated categories to deal with
uncertainty in complex projects: contract rules and relationships.
They argue that, rather than one all-encompassing ex-ante detailed
contract, the contract governance should be based on a more gen-
eral formal contract and additional informal arrangements based on
mutual relationships (Brown et al. 2015). Earlier, Ling et al. (2014)
discussed that relational contacting is based on cooperative ap-
proaches, such as partnering, alliancing, joint venturing, long-term
contracting, joint risk-sharing mechanisms, and integrated project
delivery, where formal contracts spell out the rights, responsibil-
ities, and liabilities of the parties concerned.
Many studies (e.g., Ling et al. 2014; Xiong and Zhang 2016)
have confirmed that collaborative relationships are an important ad-
dition to formal contracts, and that they can facilitate the solution to
an issue or problem at hand. Related to this, Zou et al. (2014) found
that the commitment of senior executives and the integration of the
different divisions and multidisciplinary teams were critical success
factors in PPPs. Additionally, Mistarihi et al. (2012) discussed the
need for PPP managers to be knowledgeable and qualified to man-
age the social, constructional, operational, and financial aspects
of PPP projects. For a PPP setting, they stress the importance of
J. Constr. Eng. Manage.
 interpersonal skills, the skill of “scoping in/out,” conceptual skills,
project management skills, and communication and coordination
skills.
Several scholars have focused on mechanisms that allow con-
stant adaptation to potential challenges in the delivery of infrastruc-
ture projects. For example, Hertogh and Westerveld (2010) claimed
that the success of large and complex infrastructure projects is de-
termined by five factors: a higher order of cooperation, meaning
that stakeholders in the system use their cooperative capacities to
align their interests in such a way that they produce system outputs
that are mutually beneficial; project champions; competent people
making the difference; capability to find unique management so-
lutions; and using windows of opportunity.
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.
Kumaraswamy and Rahman (2006) considered working in
teams as a form of cooperation and discussed how effective and
successful teams can generate benefits in complex projects. They
found that teams generate a wider range of ideas than individuals
working alone. Teams can respond to change more effectively,
since improved trust and communication will help a team to gain
greater clarity in expressing ideas through group discussion. Addi-
tionally, it has been argued that (Xiong et al. 2018) increased
information availability between the actors in projects contributes
to responsiveness.
Research Approach
Single Case Study
Because of the complex and uncertain nature of large infrastructure
projects, there is a need to be able to deal with variations. In the
literature, several dealing mechanisms are identified, such as stand-
ardized contracts with clauses that provide for flexible agreements,
but also more social-relational solutions, such as increasing team-
work. However, there is little evidence about how these dealing
mechanisms work in practice. Yin (2014) writes that a case study
can contain either a single study or multiple studies. The case study
method explores a real-life, contemporary bounded system (a case)
or multiple bounded systems (cases) over time, through detailed,
in-depth data collection involving multiple sources of information
and reports a case description and case themes (Creswell 2013).
According to Creswell (2013), it is not primarily aimed to analyze
cases, but to explore a setting in order to understand it. It makes the
researcher have a deeper understanding of the exploring subject
(Gustafson 2017).
This paper presents a real-life case study to examine which
mechanisms are applied in practice and how they are used in a
project context.
A single case approach is not uncommon in studies of complex
project environments. For example, Cruz and Marques (2013) ex-
amined contract flexibility and coping with uncertainties in a single
hospital that was developed as a PPP project. Because we were
especially interested in the social interaction taking place in the
practice of dealing with uncertain situations additional to the formal
rules, we chose to focus on the practice of a particular case (see also
Gustafson 2017) and come to know it well: “an empirical inquiry
that investigates a contemporary phenomenon (the ‘case’) in depth
and within its real-world context.”
It is a research strategy that concentrates on understanding the
dynamics that are present within single settings (Eisenhardt 1989;
Flyvbjerg 2006). We particularly studied the practice of a large-
scale PPP infrastructure project by looking at what actually hap-
pens when coordinating and dealing with variations. Concentrating
on a single case instead of multiple cases enabled us to observe all
© ASCE 04019073-3
J. Constr. Eng. Manage., 2019, 145(11): 04019073
the steps in the variation process in detail and to study the formal
and informal modus operandi of the management of the legal, tech-
nical, contract, and stakeholder aspects in a trusted environment.
The aim was to capture managers’ actions as they dealt with var-
iations and to understand how formal and informal procedures
facilitated or impeded their resolution in the execution phase of
project. Because of the confidential character of the observations
and the complex nature of the phenomenon, such depth would not
have been possible within a different research approach. This
unique case study showed that informal dealing mechanisms are
considered necessary in practice in addition to the contract. It also
showed what kinds of informal mechanisms are used in practice
and how they are used. This knowledge is in itself valuable for con-
sideration in future contracts and for creating favorable conditions
to deal with variation in projects in general. Hence, it also forms a
start for further research.
A1/A6 Motorway Case
The case of our study was the A1/A6 motorway extension in
the Netherlands. This PPP project is part of a major multiproject
public infrastructure program called the Schiphol-Amsterdam-
Almere (SAA) programme. Traffic along this corridor has greatly
increased over the past 15 years, primarily due to economic growth
and a growing population in the area. Additional traffic growth
is expected due to the expansion plans of the cities of Amsterdam
and Almere. The purpose of the SAA program is to improve traffic
flow, accessibility, and liveability (i.e., socioeconomic conditions)
within the SAA corridor. The A1/A6 project is the biggest and
most complex project in this program. The motorway is approxi-
mately 23 km long and is located between the towns of Diemen
and Almere Haven. By realizing the project, the capacity of the
infrastructure will roughly double. The project involves a total of
70 new civil engineering structures, which include a 60-m-wide
aqueduct (Europe’s widest); a rail bridge near Muiderberg with
a span of 380 m; and an additional bridge adjacent to the existing
bridge over the Randmeren (the Hollandse Brug), also 380 m in
length.
The A1/A6 project has a nominal contract value of EUR 1 billion
(excluding taxes) and a tenure of 30 years (2012–2042). Rijkswa-
terstaat (the executive agency of the Dutch Ministry of Infrastruc-
ture and Water Management) tendered this project under the third
edition of the standard DBFM contract to the service purpose ve-
hicle (SPV) company SAAone. SAAone includes major construc-
tion companies such as the German company Hochtief and the
Dutch companies of VolkerWessels and Boskalis, as well as the
fund management company, the Dutch Infrastructure Fund (DIF).
The contract close of the tender was in 2012, while the financial
close was in 2013. The latter refers to the point at which all the
interlinked conditions mandated through the project contracts, in-
cluding the funding, were met. The construction activities started in
2013 and are scheduled to proceed until 2020.
The DBFM contract is the key contract between the client and
the SPV, where the SPV is responsible for the design, building,
financing, and maintenance of the project. The SPV has a financial
agreement with financers through syndicated loans. This means
that, on the debt side, a group of financers provides finance to the
SPV for the implementation and maintenance of the project. The
Ministry of Infrastructure and Water Management acts as a guar-
antor for the financers through a direct agreement with them. The
client can repay financing through periodic milestone payments to
the SPV if the latter performs according to preset availability and
safety specifications.
J. Constr. Eng. Manage.
 The actual construction of the project is realized through an
engineering procurement and construction (EPC) arrangement
through a contract between the SPV and the contractors in the
EPC. A separate contract will be signed later for maintenance.
The SPV receives equity from shareholders (or sponsors) through
equity contribution agreements. Usually, the shareholders are con-
nected to (or the same as) the EPC contractors, which creates a
direct relationship between the risk management of the SPV and
the EPC. To complete the contract structure, Rijkswaterstaat has
administrative agreements with 13 local authorities to guarantee
stability in the environment of the project. In addition, several
external companies were contracted during the tender phase and
the realization phase of the project to support and advise Rijkswa-
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.
terstaat and SAAone regarding legal, technical, and insurance
aspects.
Research Methods and Data Analysis
As mentioned in the Introduction, the study started with a review of
the project management literature regarding dealing mechanisms
for variation. We did not include the literature on relational con-
tracting and relational governance, because the DBFM contract
type as applied in the Netherlands is not a relational contract. In
essence it is a design and construct contract with additions turning
it into a combined project delivery and service contract. Interest-
ingly, the case studied evolved to a kind of relational contract with
its foundation in a traditional contract setting. We were especially
interested in how this came about and what happened in practice.
This gave us the opportunity to look at the interaction mechanisms
that enhanced this evolvement. Relational governance is about the
processes and institutional settings in which relationships may
evolve. Because we studied the practice in the realization phase
of the project, the focus of a project is then more on management
than on governance. Most governance literature stays at a high level
to look into phenomena. We wanted to go a step deeper and there-
fore especially focused on (relational) project management and
related literature.
Data were gathered through a combination of archival research
into the project history, observations, and semistructured interviews
in the period of September 2016 to February 2017. A case study
protocol was used to carry out data collection (Eisenhardt 1989;
Yin 2014). To construct validity (Creswell 2013; Yin 2014), infor-
mation was gathered from all available sources to understand the
phenomenon within the context of the entire project. The archival
research comprised the DBFM project and the contract documents,
including the maps and drawings. Additionally, annual reports,
newspaper articles, organizational documents, and reports of the
client and the SPV backbone companies were studied. Additional
information from memos, minutes of meetings, and contract
amendments provided insights into the playing field of variations.
Access was granted to all the digital sharing tools between the au-
thority and the SPV and, therefore, to all variations and contract
amendments, and to all the minutes of contract and change meet-
ings after financial close.
To gain a better understanding of the mechanisms described in
the documents, 21 semistructured interviews were conducted with a
diverse group of people from different organizations and back-
grounds, among them directors, contract and project managers, en-
gineers, advisors, and lawyers. In this study, client representatives
were grouped as contracting authority practitioners (CAP1–
CAP11), while SPV practitioners were classed into 10 groups
(SPVP1–SPVP10). Organizational organograms were used to make
a first selection of interviewees. This selection was done together
with the contract manager of the project. A brief introduction
© ASCE 04019073-4
J. Constr. Eng. Manage., 2019, 145(11): 04019073
to the research objectives and the interview questions was pro-
vided to the interviewees via email 1 week before the interview.
All interviews were conducted in face-to-face meetings of about
1.5–2 h by the first author. In some cases, the researcher invited
two contract managers to the same interview to encourage further
discussion. The Appendix presents the interviewees and interview
questions.
To gain further insight into the actual modus operandi, three
different kinds of participant observations were carried out by the
researcher during a 7-month research period: site visits, contract
meetings, and informative visits to the offices of the client and the
SPV. Informative questions were asked to several members of the
SAA team throughout the complete period of observation. The site
visits helped the researchers to understand the issues encountered
during the execution of the project and the difficulties arising from
these issues. The visits to the client and SPV offices were helpful to
understand the relational networks within which the different
managers worked.
Additionally, multiple authority-SPV contract meetings, authority-
SPV variation meetings and internal authority meetings were
attended. In these meetings, the observation focused on various
aspects, such as the mechanisms used to deal with variation, styles,
processes used to find solutions and interactions of different man-
agers to elaborate; discuss; solve problems; and allocate respon-
sibilities for the solutions. Detailed sketches of these meetings
were recorded, similar to Shipton et al.’s (2014) “vignettes,” to re-
present relationships between organizations and actors. The atmos-
phere, modes of communication, and flexibility of the actors were
noted during and analyzed directly after the meetings. Simultane-
ously, feedback was received from contract managers and, as a re-
sult, suggestions for improvements in the dealing mechanisms were
incorporated into practice so that their effects could subsequently
be observed.
According to Yin (2014), a data management strategy is im-
perative in case study research. An Excel spreadsheet was used
to organize and conduct the data collection. This sheet included
objectives; relevant readings; and data collection procedures,
such as sources of data, contact names, and case study ques-
tions. As suggested by Nowell et al. (2017), the researchers
familiarized themselves with the data while all files were
named with a unique identifier of a source specific to the case.
Qualitative data were captured in various forms, including re-
cords of observations, transcripts of interviews and meetings,
archival documents, multimedia, sketches, maps, drawings, and
photographs.
The analysis of all the data was done by way of coding. First the
researchers produced initial codes with attributes to differentiate
among the different ways of dealing with contract variations based
on the studied literature. The data were identified, organized, and
indexed relative to these themes. Second, the miscellaneous coded
data supported new themes, resulting in a second consistent work-
able set of themes and codes. Third, we bundled themes into spe-
cific dealing mechanisms and related the codes accordingly. This
method resulted in the following categories of dealing mechanisms:
contract provisions, human relationships, relational governance,
digitalized tools, professional knowledge, and actor competences.
Contract provisions refer to DBFM agreement articles; human
relationships include personal relationships between parties. Rela-
tional governance refers in this study to the project management
systems in the organizations. Digitalized tools refer to shared IT
systems. Knowledge means tacit and explicit knowledge, while
actor competences refer to the skills of the project participants.
The findings for each category of dealing mechanisms are dis-
cussed below.
J. Constr. Eng. Manage.
 Results
The results are presented in this section according to the categories
of dealing mechanisms as described above.
Contract Provisions
The Netherlands has no specific law for PPPs. The Dutch DBFM
model agreement complements certain sections of the Dutch civil
code with specific contract clauses. For example, the standard
model DBFM contract declares that “with respect to the occurrence
of unforeseen circumstances, parties agree that they have willingly
and wittingly entered into this long-term Agreement and that the
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.
mechanisms that are included in this Agreement are already in-
tended to deal with the consequences of any possible unforeseen
circumstances that may arise.” This clause thus stipulates that par-
ties cannot ignore variations that occur over the long life span of a
project. In addition, it acknowledges that the standard DBFM con-
tract is incomplete. Therefore, parties agree to the need to renego-
tiate provisions for dealing with variation. On this point, SPVP1
mentioned that “circumstances can always arise: there are known
knowns, known unknowns and unknown unknowns at the time of
signing. We add new clauses when there is a need for variation on
the physical asset. This provision provides flexibility, accepting un-
certainties under our law.” CAP1 stated that “there are unknowns in
the project, and one cannot be accountable for these unknowns.
We act reasonably and fairly regarding our law.”
The process of dealing with variation takes place within the
boundaries set by the agreement. Regarding this, the agreement
can be seen as a foundation for this process. CAP1 added “The
DBFM agreement is applied under Dutch civil law with a Standard
Contract form. It has specific rules and regulations for contract ap-
plication and progress of variations (change procedures, changes in
law and dispute resolution). For example, when a physical asset has
a variation, contract clauses explain how compensation can/should
be achieved, who has the responsibility, and allocation of risks
under variation. Provisions of Contract comprise a foundation
and explain who will take which action.”
The provisions in the standard DBFM agreement specify fea-
tures and characteristics of variation, information exchange, and
each party’s responsibility during the renegotiation process. These
provisions have an important consequence for the allocation of
risks under variations. Provisions that deal with variations include,
for example, the change procedure (Article 13 and Schedule 5) and
the dispute resolution (Article 21). The change procedure includes
the right of each party to propose changes. Change is characterized
as a “contracting authority change” and/or as a “contractor change.”
There are no limits to the size of variation that the government may
require. The change procedure is further elaborated in “Schedule 5
Changes,” which contains the formal change management process
of the authority and the private party, to be agreed upon by the
partners. Once agreed by both parties, this process is documented
as an amendment to the initial contract. In this process, the private
party has to provide full details of the costs and timing that will
occur when implementing the variation. The types of provisions
are designed to promote win-win outcomes by identifying compen-
sation events and to regulate the process of renegotiation. Parties
agree on how the variation will be implemented based on this
procedure.
An expression of the contract provisions mechanism of the
Standard DFBM contract is illustrated in a statement made by
CAP4 during an interview: “We use the contract as guidance.
We follow Article 13 and Schedule 5 of the DBFM contract for
the variation process. [ : : : ] When a change occurs, we add new
© ASCE 04019073-5
J. Constr. Eng. Manage., 2019, 145(11): 04019073
clauses or subclauses to our output specifications and payment
schedule. [ : : : ] We use written rules as a complementary mecha-
nism to our relationship.” But CAP10 also explained that “If there
is a big shock, we should be able to put in place a mechanism to
handle it, which should be the contract. There is a need for man-
agers to have extensive knowledge about the contract clauses.”
In the DBFM standard contract, the distinction between the con-
tracting authority and the contractor’s view of change is a signifi-
cant factor with respect to action, and it explains the way changes
are proposed. The change procedure differentiates between “small
changes” (below a certain financial threshold) and “other changes.”
In Schedule 1 of the standard model DBFM contract, small changes
are explained and a threshold has to be decided on between the
client and SPV during contract close. In the A1/A6 project, an extra
category of very small changes was added during the construction
phase for practical reasons, which refers to changes that do not have
any financial consequences for the project. During an interview,
CAP4 explained that “we added this formality to reduce complexity
and the number of changes; some changes are too small, have no
financial consequences, but still take time to manage.”
For small variations, the contractor must respond to the change
request made by the contracting authority within 10 days. For big
changes, they have 20 days. However, in practice, we observed that
these boundaries are not considered very important to either party.
The focus is on the overall availability date for completion rather
than these response dates, which means a response is given as soon
as possible in practice. If the work is not finished by the availability
date, the SPV will receive the completion fee later than envisioned.
According to SPVP6, “We are forced to be very quick in our re-
sponse to the changes, because the availability date is very close, so
we take a collaborative approach to changes.”
The contract article that was used most to deal with variation
was Article 13.1e: “If the contractor can demonstrate to the con-
tracting authority that change has had an adverse effect on the risk
profile of the work or on the financers then the contractor must
receive a guarantee that the contracting authority will pay compen-
sation for or bear the additional risks.” According to CAP7, “This
article is important when tensions occur around benefit sharing
[ : : : ] Financiers are likely to see variations as a source of risk.
However, in some circumstances, we help [our contractor] to solve
problems caused by change, bearing the additional risk.”
Human Relationships
One of the aspects that was mentioned most frequently during
the interviews was that relationships are more predominant than con-
tractual terms when dealing with variations. There appears to be a
strong need for relational mechanisms additional to the fixed
rules. In this respect, the new business strategy (Market Vision) of
Rijkswaterstaat, “Working with the Market,” was frequently
mentioned. In January 2016 (during the implementation phase of
the A1/A6 project), this strategy was mutually agreed on by
Rijkswaterstaat and several other client organizations and contractor
organizations as a way of doing business together and dealing with
problems encountered in practice through more collaboration.
The Market Vision aims to create a better atmosphere and more
value for society by encouraging all parties to collaborate closely.
By increasing openness between the public client and the con-
tractors through the sharing of knowledge and by stimulating co-
operation, it is expected that changes can be dealt with in a more
effective manner by both parties, and added value can be generated
by cooperation, rather than losing value through contractual
battles. According to CAP9, “We apply the Market Vision to create
synergy with our private partners. When we deal with variations,
J. Constr. Eng. Manage.
 we use the contract as a basis, but we give our relationships a more
important place in the life cycle of the contract.” CAP10 explained
that “Unexpected changes can cause tensions, but being aggressive
toward each other does not bring any gains. [ : : : ] We do not tend to
go to our lawyers to solve issues (avoiding disputes).”
Workshops were regularly organized to develop relationships,
to gain trust and create openness, and to discuss specific issues
or events. These methods proved successful: “After some negotia-
tions we got a pre-order to realize a new design for the Zilverstrand
[a particular part with a small beach] that had to be checked by all
seven stakeholders. [ : : : ] We organized it as a design studio, with a
plan and a schedule meant to help us to come to an agreed design.
We started in October 2015, and the agreed design was realized in
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.
March 2016” (SPVP9).
It was also found that the better the contracting partners know
each other, the more willing they are to manage changes in a rela-
tional way. This applies especially to the contract managers, as
mentioned by CAP8: “In this agreement, our contract manager
has a very good personal relationship with the SPV counterpart;
being friends [ : : : ], if managers do not get on, the end result will
be no problem-solving.” SPVP10 indicated that “We do not rely
solely on a rigid formal contract mechanism or formal arrange-
ments. I can call my counterpart anytime to discuss any event, like
friends would do, to be more effective.” Most of the interviewees
indicated the importance of being open to each other: “We ex-
change our thoughts on pros and cons while managing changes.
It is very important to understand each other’s interest while dealing
with change” (CAP11). Similarly, SPVP6 indicated that “We are
transparent with each other and this strengthens our trust. [ : : : ]
We can think in a cooperative way and understand each other; in-
formation flows from one party to another party while dealing with
changes.” The results indicate that trust and openness facilitate
cooperation, and vice versa, and allow for the effective solving of
unexpected problems. This kind of openness also became visible in
the seating arrangement during the meetings between the SPV
and the client: the various participants sat next to each other rather
than in their own groups, and this setting arrangement evolved
naturally over time.
Relational Governance
The governance structure was set up at the beginning of the project
but evolved during the project execution. The authority used a
standardized integrated project management (IPM) model as their
organizational structure, which acknowledges the integration of
different management functions (project manager, stakeholder
manager, technical manager, contract manager, and manager of
information and control) into a single integrated project team.
The IPM model provided an important mechanism to manage var-
iations. When a change occurred, it was discussed with all team
members of the IPM team, which ensured integrated information
flow, coordination, and transparency of the issues. During the inter-
views, CAP5 pointed out that “This model can be illustrated as the
firm’s philosophy. [ : : : ] Under a significant event, the IPM model
provides an effective way of communicating and understanding
different interests.” CAP3 added to this that “the lack of formal
hierarchy between managers from different disciplines allows for
a speedy flow of information.”
Working with the IPM model also regulated the counterparts
in the various parties. The SPV attempted to mirror this model in
its own governance structure. The business plan for the project
included a communication matrix, which lays out who does what,
and explains who will meet with whom during change manage-
ment. According to the matrix, the client project manager was the
© ASCE 04019073-6
J. Constr. Eng. Manage., 2019, 145(11): 04019073
counterpart of the chief executive officer (CEO) of the SPV. How-
ever, we observed that this initial mirror shifted over time and
the contract manager became the counterpart of the CEO, while the
project manager became the counterpart of the shareholder along-
side the program director. Major issues regarding changes were
discussed and actions were decided on this level.
The SPV organization structure also demonstrated integrated
management of several organizational units. Their organization
was divided into three parts: ground works, civil works, and design
work. As SPVP1 explained in an interview, “The SPV and EPC
Company have become very large; we have employed thousands
of people from different backgrounds in a short time. Coordination
is challenging. [ : : : ] It is people management. Collaborative rela-
tionships help with the daily management of variations. Also, a
flexible organization structure helps coordination during the varia-
tions process.” Organizational flexibility was regularly mentioned
as a significant factor in the variation process. According to one
interviewee, in such a large organization, “We should be more
flexible in the roles during the process of management. Better
understanding of the other’s contribution by all team members
is important when dealing with variations” (SPVP4). SPVP5 added
to this that “more integration brings effective responses to the
events.”
Digitalized Tools
Information technology was heavily used in the variation processes
of the A1/A6 project. The SPV created an “information cloud” to
coordinate information about variations. Most of the information
used to make decisions was stored digitally in this cloud. This pre-
sented a single and coordinated information tool that enabled
data sharing and facilitated coordination between actors. It is inter-
esting that this information cloud was also made accessible to the
authority.
The standard Request for Change (RfC) tool was used by the
authority to follow the variation process in chronological order.
This RfC tool was adjusted to the contract provisions of the varia-
tion management procedure in the DBFM contract, and as such
supported the decision-making process. Thus, the RfC tool acted
as the central database with regard to variations for the client. Every
variation had a serial number and was included in the variation list
data. It was observed that this list comprised big/small/very small
variations and was updated every week in the system. Many inter-
viewees highlighted the importance of this tool. According to
CAP1, “It is an easy way to follow the steps of the variation pro-
cess, control, budget, and time. This also makes it easy to visualize
all variations.” CAP10 explained the importance of feedback loops
in this tool, to anticipate, resolve, and approve variation. According
to CAP2, “It is the quickest way to see and respond to changes.
This tool improves our performance.”
Relatics and Think Project tools (both cloud systems for sharing
data) were used as the central information database for the contract
and thus formed an information backbone for the variation process
on the SPV side. A variety of data were linked to this database,
such as designs, plans, output specifications, contract documents,
International Organization for Standardization (ISO) forms, man-
uals, and maps. It was observed that when a change occurs, there
is a need to update documents related to the variation. CAP3 in-
dicated that “the SPV provided login details for Relatics and the
Think Project. This creates openness between us and the SPV
which also strengthens our relationship.” According to SPVP3,
“shared access tools support our cooperation strategy giving clarity
to hundreds of pages of formally written contract.” Both parties
maintained good record keeping using these tools. Any variation
J. Constr. Eng. Manage.
 was recorded and clearly documented by both organizations.
It was observed that the cloud system fostered integration and col-
laboration between actors.
Professional Knowledge
The observations indicate that the professional knowledge that is
available within the project environment is an important mecha-
nism during the variation process. The authority ensured that the
IPM team understood the PPP contract provisions very well, as
did the SPV for its contract management team. It was observed that
expertise was consciously combined with explicit knowledge
(documented information) in both organizations. During an inter-
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.
view, SPVP2 pointed to the Spoorbrug Muiderberg Bridge on the
map and stated, “We use the information that is available in our
parent organizations. We have been building these bridges for
100 years; we know best what we are doing. Our experience helps
us with the contractual variation process. Also, we are familiar with
coordinating all interfaces and risk under variations.” Another ex-
ample of knowledge exchange was provided by SPVP7: “Involving
an international partner brings positive opportunities, due to their
extensive knowledge of the correct way to respond to the changes
in PPP projects all around the world.”
Experience and understanding of the contract appeared to be very
important factors in recognizing and managing the network of
dependencies in the contracts. During several meetings about varia-
tion, it was observed that the managers checked all dependent (and
sometimes conflicting) variables in the key contracts (financial con-
tracts, stakeholder contracts, etc.) based on their respective experi-
ence. According to CAP6, “The complex nature of PPP type
contracts creates a need for technical, financial, and legal knowledge
of related contracts to deliver project imperatives on the contract
variation process.” SPV3 mentioned that “In our project, the contract
manager of the client is extremely knowledgeable, which helps him
to understand issues, and at the same time is able to consider finan-
cial constraints or technical challenges, which is unique for PPPs.”
Additional financial and technical knowledge was gained from
specialist advisors if necessary. According to SPVP3, “Our lender
technical advisors helped us a lot with regard to dealing with
changes, because they have experience from all over the world. They
acted as a bridge between the bankers and us. Without good lender
advisors, very few new loan agreements can be signed.”
The SAA program of Rijkswaterstaat also used a strategy of
sharing experiences across projects within the entire program.
Daily informal face-to-face meetings were organized and the client
organization provided its employees with opportunities to attend
workshops on PPP contracts, performance, risk, and variation man-
agement in order to develop their knowledge on these specific types
of contracts. During an interview, CAP9 suggested that “Intrapro-
ject knowledge creation and learning was explicitly used as a man-
agement strategy in the SAA program.” CAP9, from the adjacent
A6 project, indicated that “The A1/A6 project contains extensive
knowledge. This information flows to my team.” The SPV parent
organizations also provided in-house and external training pro-
grams to managers to improve their knowledge with regard to
PPPs and infrastructure projects.
Actor Competences
The last mechanism relates to a wide range of competences of the
actors, which vary from hard to soft skills. During an interview,
SPVP8 mentioned the importance of competence, adding “Our
PPP managers who are dedicated, well aware of the environment
and contract network, with the competence to build relationships,
© ASCE 04019073-7
J. Constr. Eng. Manage., 2019, 145(11): 04019073
contribute most while dealing with variations.” CAP11 stated that
“Our biggest variation (i.e., the amendment of the new Spoorbrug
Muiderberg Bridge) [ : : : ] cannot be compared to any DBFM sol-
ution. It is not copied from any other project. Having leadership,
social, and communicative skills are highly important in our rela-
tionships with the SPV, as it helps us to find unique solutions when
there is a big event.”
Tensions rose during the negotiation of big events, especially in
relation to funding and financial discussions. Power and dominance
play a role when discussions focus on the root cause of issues and
how they will affect the financial model. The competences of the
contract managers on both sides appeared to be especially impor-
tant in handling these tensions using leadership skills and openness
in discussion. CAP5 explained that “The managers need to know
how to act in dynamic situations. Social skills are very important
for public managers, for example, conversations being neither too
formal nor too informal. There should be a balance between the
interests of public and private.” SPVP5 added that negotiation skills
such as “verbal communication and facial expressions and emo-
tional control are important for our interests, also in discussions
about problems caused by variations.” It was considered especially
important for PPP actors “to have the necessary leadership and
communicative skills : : : to be effective in variation management
and to deliver value for money to society” (CAP8). This was also
valued by SPV, as indicated by one interviewee, who said that
“we are very lucky that our client organization is well aware of our
binding related contracts to DBFM” (SPVP4).
Summary of the Results
The results of the study confirmed that contract provisions are
generally written ex ante and change over time through the addition
of new clauses or subclauses, or by removing clauses ex post.
Therefore, the contract is continuously adapted to reality by rene-
gotiations (Cruz et al. 2014; Hart 2017; Xiong and Zhang 2014).
The Dutch DBFM standardized contract, as used in our case, was
actually designed to be incomplete due to the impossibility of
specifying every element ex ante, and in this way it allows for
the renegotiation of provisions. The case also demonstrates that
several dealing mechanisms were used and developed to cope with
variation in practice additionally to the ex-ante contract provisions.
The different mechanisms for dealing with variations as observed in
the case study and described in this section are summarized in
Table 1.
Discussion
This study observed the daily real-life practices of dealing with
variations in the context of a PPP project. Many of the mechanisms
as identified in the literature are reflected in our case findings. Con-
tract provisions are not only an important mechanism for dealing
with variations in PPP coordination but are seen as an essential
foundation to the process. However, the case also revealed that
projects do not or cannot rely solely on contract provisions. In line
with the findings of Song et al. (2018) and Xiong and Zhang
(2014), the results show that PPPs offer incentives to all partners
not to end the collaboration and stimulate parties to conduct rene-
gotiations and attempt to resolve variation issues caused by project
dynamics. The foundation of this incentive is the principle of rea-
sonability and fairness, guaranteed by the contract provisions. This
principle means that if one cannot reasonably foresee an issue or its
consequences, one cannot be held responsible and/or accountable.
Reasonability and fairness (good faith) play a noteworthy role in
the Dutch legal system and prove to have a major influence when
J. Constr. Eng. Manage.
 Table 1. Dealing mechanisms
Attributes
• Standard change procedure
• Allocation of initiative
• Classification of variation
• Mutually agreed change management process
• Agreement about information exchange in case of variation
• Compensation arrangement
• Contract adaptability
• Reasonability and fairness
• Having a shared vision on collaboration (the new market strategy of
Rijkswaterstaat encourages collaboration)
• Shared workshops to discuss issues or events
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.
• People in key roles knowing each other
• Openness and transparency
• Shared cloud systems used between parties for variation information
• Coordination between parties
• Shared relatics tool used for contract information
• Standard request for change tool used by the client, adapted to the agreed change
management process
• Influence of authority structure (IPM model)
• Role and position of project manager and contract manager and their counterparts
• Flexible structure over time
• Integrated management in SPV and EPC (many people and many suborganizations)
• Contract understanding; awareness of project environment; technical, legal, and
financial knowledge
• Knowledge of key contract structure and relationships (network of contracts)
• Sharing knowledge and learning, combining experience with contract understanding
• Leadership, social, and communicative skills
• Competence to build relationships
• Conflict handling (especially for contract managers)
dealing with variations. Relying on the legal guarantee of fairness,
parties want to act reasonably when dealing with variations during
the implementation period beyond the ex-ante allocated risks.
They want to deliver the best value and obtain long-term future
benefits.
As also indicated by Brown et al. (2015), relational dealing
mechanisms are an important addition to the contract for handling
variations. The complementary character of relational mechanisms
allows partners to be more engaged and act according to the spirit
of a contract rather than the letter. The contract might stay in the
drawer, only being taken out in exceptional situations. The case
study showed that relationship practices are more predominant than
contractual provisions when dealing with variations. In line with
the literature on incomplete neoclassical contract forms (e.g., Klijn
and Koppenjan 2016; Hart 2017), the case shows that actors mainly
consult contractual agreements for guidance and/or consider them
as a baseline on which to rely. As was also found in the study of
Ling et al. (2014), the actual dealing with variation is more depen-
dent on the development of interpersonal relationships, the formal/
informal structure of the organization and its flexibility, and the
knowledge and skills of the relevant employees. The specific forms
of these dealing mechanisms will depend on the type of project, the
constitution and character of the project teams, and the context of
the project.
The study revealed that partners develop a common approach by
translating the contract provisions into their mutual relationships to
achieve a certain degree of cooperation. The focus on relationships
leads all parties to have a better understanding of each other’s in-
terests and to understand the ways that parties perceive the contract
© ASCE 04019073-8
J. Constr. Eng. Manage., 2019, 145(11): 04019073
Refer to Dealing mechanisms
DBFM articles that present Contract provisions
formal mechanisms to deal with
variations
Personal relationships between Relationships
managers of SPV and managers
of authority
Digitalized shared IT systems Digitalized tools
Role and position of the people in Relational governance
the organizational structure
Flexibility of the structure over
time
Specific knowledge of PPPs Knowledge
Personal skills of SPV and Competences
authority managers
terms. In the case study, the pursuit of collaborative relationships
was apparent throughout the daily management of variations. For
example, partners phoned each other daily and freely, revealing a
high degree of communication and transparency; they sat next to
each other in meetings, rather than opposite each other with their
peers; the parties organized shared interactive workshops to keep
relationships active and look for solutions through cocreation; and
they also shared login details for digital tools, even when this was
not a contractual obligation.
These personal relationships decreased the level of formality of
dealing with unforeseen events. Notably, effective and personal
communication creates a favorable environment of trust and trans-
parency in the renegotiation process. What helped was that the
fairness provision in Dutch Civic Law safeguards parties against
potential abuse of trust and transparency and the fact that the client
and the contractors involved in the EPC agreed to work according
to the Market Vision, in which private entities and authorities are
encouraged to act in cooperation. In line with the findings of
Hertogh and Westerveld (2010) and Mistarihi et al. (2012), it was
observed that highly skilled and experienced project participants
make a real (positive) difference when confronted with variations.
Both organizations ensured that they had competent managers in
the project, who were well aware of the project environment
and the network of related contracts in the DBFM, among other
aspects.
The study showed that knowledge was considered an important
mechanism for dealing with variations. On the one hand, under-
standing the PPP contract and its procurement is essential to deal-
ing with variations. On the other hand, knowledge development and
J. Constr. Eng. Manage.
 continuous learning increase the capacity to deal with variations
(adaptive capacity). In our case study, activities such as exchange
programs between the authority’s contract managers from adjacent
projects supported the leverage of internal knowledge, improving
the public sector’s position in the PPP contract. Both organizations
were well aware of the importance of knowledge sharing and de-
veloping joint knowledge on PPPs. Both organizational managers
were involved in constant PPP training during the project, facili-
tated by their own organization. Furthermore, external companies,
such as lenders, technical advisors, and international partners, con-
tributed to knowledge development by bringing in technical advice
and international examples of possible solutions. The findings
confirm the importance of tacit knowledge gained by experience.
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.
However, experience alone is insufficient, if not combined with
extensive contractual and financial knowledge.
Furthermore, relationships rely heavily on the communication
skills and characters of the actors, with the combination of actors
particularly important. This requires a flexible organizational struc-
ture in which project participants can be replaced if necessary.
Informal communication paths rather than formal meetings were
intensely used to deal with variations (see also Spiller 2018).
The standard internal integrated project management approach
(IPM model) of the authority provided the opportunity for each dis-
cipline to align their views and deal with variations in an integrated
way. In practice, contractors normally shadow this model in their
organizational structure. It might be asked whether this actually is
the right governance structure from the contractor’s perspective,
since they have different roles and responsibilities from those of a
public client. It was observed that in practice the predefined struc-
ture naturally evolved during the process, with counterparts chang-
ing during the project implementation, due to personal relationships
and different competences.
Finally, the results indicate that shared digitalized tools contrib-
ute to dealing with variations. These tools are designed according to
contractual rules and provide an information flow between partners.
Digitalized cloud-based tools enabled an easy flow of information
between the authority and the private party and encouraged open-
ness and transparency between partners. The shared cloud systems
improved the speed of information sharing, enabled the exchange
of ideas, and fostered collaborative behavior. This also showed a
foundation of trust and created more trust in the project and its part-
ners, which in turn strengthened the relationship between all parties
and actors. Additionally, the renegotiation process was expedited
and the decision-making process improved by the availability of
open and adequate information.
Conclusions and Implications
The aim of this study was to achieve a better understanding of the
range of different contractual and noncontractual mechanisms em-
ployed in the coordination of a PPP to deal with contract variations.
We chose to study a single case to get in-depth insight into current
working practices of dealing with variation in a PPP contract set-
ting. This allowed us to better understand the role of social inter-
action in the practice of dealing with uncertain situations additional
to the formal contract rules. The results indicate that, in addition
to contractual provisions, five interrelated and complementary
mechanisms are considered important and necessary: human rela-
tionships, relational governance, digitalized tools, professional
knowledge, and actor competences.
From the findings, it can be concluded that contract provisions
governed by formal legal systems are an essential foundation for
dealing with variations in infrastructure but need to be adaptive.
© ASCE 04019073-9
J. Constr. Eng. Manage., 2019, 145(11): 04019073
Contract provisions are written ex ante and are not able to deal
with all variations over time. Therefore, they need to be able to
be adapted over time by adding new subclauses, removing clauses
ex post, or even adding a new contract. This means that the contract
should be able to continuously adapt to reality.
To make this adaptability possible, social dealing mechanisms
based on interaction between the partners proves to be essential.
Based on the principle of reasonability and fairness, Dutch Civic
Law creates the opportunity to use different mechanisms rather than
solely relying on contract provisions.
Strong relationships support collaborative problem-solving and
aligned actions. Transparency and openness between partners, in
particular, encourages the development of a positive renegotiation
atmosphere based on trust rather than formal rules. A mutual vision
on how to relate to each other is also important, such as the author-
ity’s new market strategy, in which private entities and authorities
are encouraged to act collaboratively. In fact, the contract provi-
sions that were observed suggest that the rigidity of a contract can
be tackled through ex-post mechanisms when managers are explic-
itly steered toward this.
It was found that managers with good communication and co-
ordination skills, who are well aware of the project environment
and the contractual network, play an important role in dealing with
variations. Their expert skills and social competences can lead to
adequate solutions being found when unforeseen events occur. Pro-
fessional knowledge, especially experience from previous projects
(e.g., understanding the contract from legal, technical, and environ-
mental perspectives), is a valuable mechanism. Knowledge devel-
opment and continuous learning increase the capacity to deal with
variations. Although some learning across projects was observed,
project learning could be made more explicit in public and private
organizations that are involved in PPPs.
Transparent digitalized information-exchange tools that struc-
ture information can support decision making when dealing with
variations. Using a shared cloud system makes it easier to exchange
ideas, reduces knowledge asymmetry, increases transparency, and
creates trust in the project, which in turn strengthens the relation-
ships between partners. Investing in a good information-exchange
structure that supports the competences of the project team is not
only important for complex PPP projects but for any infrastructure
project.
The predefined organizational structure of PPP projects is also
important in building relationships during the initial phase of a
project, but should be flexible and able to evolve over time. Coun-
terparts changed roles during the project implementation due to
personal preferences and different competences. Relational dyna-
mism complements contractual mechanisms and provides ex-post
flexibility.
Like every study, this research has its limitations. Firstly, it
was carried out on one specific type of PPP, contracted as a DBFM
in the construction industry. Secondly, the study occurred in the
Netherlands, within a specific culture and law. Thirdly, we de-
liberately chose to study a single case in depth, which has to be
considered when generalizing the conclusions. Nevertheless, we
believe that the results are valuable also for parties dealing with
variation in projects outside the Dutch context, but they need to
be carefully translated to the specific contexts of the reader.
Future research could focus on other contracts (such as common
term agreements) to understand the relationships between SPVs
and financers during variations, an aspect that was not addressed
in this study. Furthermore, the study could be elaborated to a com-
parative multicase study. Equivalent cases might be found in other
sectors, such as telecommunications, health, or energy, where sim-
ilar or different mechanisms might be observed.
J. Constr. Eng. Manage.
 Appendix. Interview Questions
No. of
Organization Position interviews Interview questions
Rijkswaterstaat Project director 1 • Can you give me an overview about your organization and your background?
Project manager 2 • How would you describe the characteristics of variations?
Contract manager 2 • What process have you used in variation/change management? How do you deal with
Stakeholder manager 2 unknowns in the A1/A6 project?
Technical manager 1 • What are the key factors to deal with variations?
Lawyer 1
• Which contract provisions do you use to deal with variations in the DBFM contract?
Technical advisor 1
SPV CEO 1 • How does the Dutch legal system influence dealing with variations?
CFO 1 • Can you tell me the relational approach between Rijkswaterstaat and SPV?
• Can you tell me any other mechanisms that complement the DBFM standard contract to
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.

COO 1
Project manager 2 help you deal with variations?
Contract manager 2 • What is the new business strategy of Rijkswaterstaat? How does influence dealing with
Technical manager 1 variations?
Lender technical advisor 1 • Can you give me a specific example of the implementation of the new business strategy
of Rijkswaterstaat (Market Vision)?
• Can you explain governance structure of your organization during the implementation
phase of the project?
• What project management model is included in the business plan to deal with changes
in your organization?
• Can you tell me about your organizational structure and your decision process?
• Can you tell me about the biggest change you managed? What type(s) of mechanism(s)
have you used to deal with variations?
• What is the function of knowledge in the change management process?
• Can you tell me how knowledge is shared for the change management process?
• What change management tools are available in your organization?
• What social skills do you consider helpful when dealing with variations?
• Do you have any other feedback or comments which you would like to share with me?
Total 21
Note: SPV = special purpose vehicle; CEO = chief executive officer; CFO = chief finance officer; and COO = chief operational officer.

Data Availability Statement
Data generated or analyzed during the study are available from the
corresponding author by request. Information about the Journal’s
data-sharing policy can be found here: https://ascelibrary.org/doi
/10.1061/(ASCE)CO.1943-7862.0001263.
Acknowledgments
This research was supported and funded by Rijkswaterstaat and the
Deltas, Infrastructure and Mobility Initiative (DIMI) initiated by the
Delft University of Technology. Preliminary findings of this case
were presented at the sixth International Symposium on Life-Cycle
Civil Engineering 2018.
References
Brown, T. L., M. Potoski, and D. Van Slyke. 2015. “Managing complex
contracts: A theoretical approach.” J. Publ. Administration Res. Theory
26 (2): 294–308. https://doi.org/10.1093/jopart/muv004.
Creswell, J. W. 2013. Qualitative inquiry and research design: Choosing
among five approaches. Thousand Oaks, CA: Sage.
Cruz, C. O., and R. C. Marques. 2013. “Flexible contracts to cope
with uncertainty in public-private partnerships.” Int. J. Project
Manage. 31 (3): 473–483. https://doi.org/10.1016/j.ijproman.2012.09
.006.
Cruz, C. O., R. C. Marques, and P. Cardoso. 2014. “Empirical evidence for
renegotiation of PPP contracts in the road sector.” J. Leg. Aff. Dispute
Resolut. Eng. Constr. 7 (2): 05014003. https://doi.org/10.1061/(ASCE)
LA.1943-4170.0000151.
Cui, C., Y. Liu, A. Hope, and J. Wang. 2018. “Review of studies on the
public-private partnership (PPP) for infrastructure projects.” Int. J.
Project Manage. 36 (5): 773–794. https://doi.org/10.1016/j.ijproman
.2018.03.004.
Domingues, S., and D. Zlatkovic. 2015. “Renegotiating PPP contracts:
Reinforcing the ‘p’ in partnership.” Transp. Rev. 35 (2): 204–225.
https://doi.org/10.1080/01441647.2014.992495.
Domingues, S., D. Zlatkovic, and A. Roumboutsos. 2015. “Forms of
flexibility in transport infrastructure PPPs.” In Proc., 2nd Int. Conf. on
Public-Private Partnerships, edited by Z. Zhang, C. A. V. Queiroz, and
C. M. Walton, 597–612. Reston, VA: ASCE.
Eisenhardt, K. M. 1989. “Building theories from case study research.” Acad.
Manage. Rev. 14 (4): 532–550. https://doi.org/10.5465/amr.1989.4308385.
Eurostat. 2016. The statistical treatment of PPP contracts: Manual on
Government Deficit and Debt. Brussels, Belgium: Publications Office
of the European Union.
Flyvbjerg, B. 2006. “Five misunderstandings about case study research.”
Qual. Inq. 12 (2): 219–245. https://doi.org/10.1177/1077800405284363.
Gustafsson, J. 2017. “Single case studies vs. multiple case studies: A com-
parative study.” Accessed February 10, 2018. http://www.diva-portal
.org/smash/get/diva2:1064378/FULLTEXT01.pdf.
Hart, O. 2017. “Incomplete contracts and control.” Am. Econ. Rev. 107 (7):
1731–1752. https://doi.org/10.1257/aer.107.7.1731.
Hertogh, M. J. C. M., and Westerveld, E. 2010. “Playing with complexity.
Management and organisation of large infrastructural projects.” Ph.D.
thesis, Erasmus School of Social and Behavioural Sciences, Erasmus
Univ. of Rotterdam.
HM Treasury. 2012. Standardization of PF2 contracts. London: Stationery
Office.
Iossa, E. 2015. “Contract and procurement design for PPPs in highways:
The road ahead.” Econ. Political Ind. 42 (3): 245–276. https://doi.org
/10.1007/s40812-015-0014-5.

© ASCE 04019073-10 J. Constr. Eng. Manage.

J. Constr. Eng. Manage., 2019, 145(11): 04019073

 Javed, A. A., P. T. I. Lam, and A. P. C. Chan. 2014. “Change negotiation
in public private partnership projects through output specifications: An
experimental approach based on game theory.” Constr. Manage. Econ.
32 (4): 323–348. https://doi.org/10.1080/01446193.2014.895846.
Khan, K. I. A., R. Flanagan, and S. L. Lu. 2016. “Managing information
complexity using system dynamics on construction projects.” Constr.
Manage. Econ. 34 (3): 192–204. https://doi.org/10.1080/01446193
.2016.1190026.
Klijn, E. H., and J. Koppenjan. 2016. “The impact of contract character-
istics on the performance of public-private partnerships: Results from a
survey among PPP projects in The Netherlands.” Publ. Money Manage.
36 (6): 455–462. https://doi.org/10.1080/09540962.2016.1206756.
Klijn, E. H., and J. M. F. Koppenjan. 2016. Governance networks in public
sector. London: Routledge.
Downloaded from ascelibrary.org by University of Texas at Austin on 09/17/19. Copyright ASCE. For personal use only; all rights reserved.
Kumaraswamy, M., and M. Rahman. 2006. “Applying teamworking mod-
els to projects.” In The management of complex projects, a relationship
approach, edited by S. D. Pryke and H. J. Smyth. Oxford: Blackwell.
Ling, F. Y. Y., Y. Ke, M. M. Kumaraswamy, and S. Q. Wang. 2014.
“Key relational contracting practices affecting performance of public
construction projects in China.” J. Constr. Eng. Manage. 140 (1):
04013034. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000781.
Liu, J., R. Gao, and C. Y. C. Cheah. 2017. “Pricing mechanism of early
termination of PPP projects based on real option theory.” J. Manage.
Eng. 33 (6): 04017035. https://doi.org/10.1061/(ASCE)ME.1943-5479
.0000556.
Liu, J., P. E. D. Love, J. Smith, M. Regan, and P. R. Davis. 2014. “Life
cycle critical success factors for public-private partnership infrastructure
projects.” J. Manage. Eng. 31 (5): 04014073. https://doi.org/10.1061
/(ASCE)ME.1943-5479.0000307.
Mandri-Perrott, X. C. 2009. “Optimising project finance solutions in the
water sector: Suggestions for enhanced public private partnership.”
Ph.D. thesis, Faculty of Spatial Sciences, Univ. of Groningen.
Mistarihi, A. M., M. S. Al Refai, B. A. Al Qaid, and M. A. Qeed. 2012.
“Competency requirements for managing public private partnerships
(PPPs): The case of infrastructure projects in Jordan.” Int. J. Bus.
Manage. 7 (12): 60. https://doi.org/10.5539/ijbm.v7n12p60.
Mouraviev, N., and N. K. Kakabadse. 2015. “Legal and regulatory barriers
to effective public-private partnership governance in Kazakhstan.”
Int. J. Public Sect. Manage. 28 (3): 181–197. https://doi.org/10.1108
/IJPSM-09-2014-0116.
National Audit Office. 2018. HM treasury: PFI and PFI2. Report by the
Comptroller and Auditor General. London: National Audit Office.
Neto, D. C. S., C. O. Cruz, F. Rodrigues, and P. Silva. 2016. “Bibliometric
analysis of PPP and PFI literature: Overview of 25 years of research.”
J. Constr. Eng. Manage. 142 (10): 06016002. https://doi.org/10.1061
/(ASCE)CO.1943-7862.0001163.
© ASCE 04019073-11
J. Constr. Eng. Manage., 2019, 145(11): 04019073
New Zealand Government, The Treasury. 2013. Contractual framework
for the standard form public private partnership project agreement.
Wellington, New Zealand: New Zealand Government, The Treasury.
Nowell, L. S., J. M. Norris, D. E. White, and N. J. Moules. 2017. “Thematic
analysis: Striving to meet the trustworthiness criteria.” Int. J. Qual.
Methods 16 (1): 160940691773384. https://doi.org/10.1177/160940
6917733847.
Rijkswaterstaat. 2014. Model DBFM agreement. Amsterdam, Netherlands:
Government of the Netherlands.
Sarmento, J. M., and L. Renneboog. 2016. “Anatomy of public-private part-
nerships: Their creation, financing and renegotiations.” Int. J. Manage.
Project Bus. 9 (1): 94–122. https://doi.org/10.1108/IJMPB-03-2015
-0023.
Shipton, C., W. Hughes, and D. Tutt. 2014. “Change management in prac-
tice: An ethnographic study of changes to contract requirements on a
hospital project.” Constr. Manage. Econ. 32 (7–8): 787–803. https://doi
.org/10.1080/01446193.2014.915336.
Shrestha, A., T.-K. Chan, A. A. Aibinu, C. Chen, and I. Martek.
2018. “Risk allocation inefficiencies in Chinese PPP water projects.”
J. Construct. Eng. Manage. 144 (4): 04018013. https://doi.org/10.1061
/(ASCE)CO.1943-7862.0001457.
Song, J., Y. Hu, and Z. Feng. 2018. “Factors influencing early termination
of PPP projects in China.” J. Manage. Eng. 34 (1): 05017008. https://
doi.org/10.1061/(ASCE)ME.1943-5479.0000572.
Spiller, P. T. 2018. An institutional theory of public contracts: Regulatory
implications. Cambridge, MA: National Bureau of Economic Research.
Taleb, N. N. 2008. The black swan: The impact of the highly improbable
(Vol. 2). New York: Random House.
Xiong, W., and X. Zhang. 2014. “Concession renegotiation models for
projects developed through public-private partnerships.” J. Constr.
Eng. Manage. 140 (5): 04014008. https://doi.org/10.1061/(ASCE)CO
.1943-7862.0000843.
Xiong, W., and X. Zhang. 2016. “The real option value of renegotiation
in public-private partnerships.” J. Constr. Eng. Manage. 142 (8):
04016021. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000843.
Xiong, W., X. Zhao, and H. Wang. 2018. “Information asymmetry in
renegotiation of public-private partnership projects.” J. Comput. Civ.
Eng. 32 (4): 04018028. https://doi.org/10.1061/(ASCE)CP.1943-5487
.0000763.
Yin, R. K. 2014. Case study research design and methods. 5th ed.
Thousand Oaks, CA: Sage Publications.
Zou, W., M. Kumaraswamy, J. Chung, and J. Wong. 2014. “Identifying the
critical success factors for relationship management in PPP projects.”
Int. J. Project Manage. 32 (2): 265–274. https://doi.org/10.1016/j
.ijproman.2013.05.004.
J. Constr. Eng. Manage.